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Things to consider about the Offset Variable Home Loan

This home loan can be used to buy residential property as a home or investment, or to refinance an existing home loan. Note that using this home loan to finance an investment comes with a higher interest rate.

Features of the loans.com.au Offset Variable Home Loan

100% offset account. A 100% offset account enables you to pay off your loan sooner by reducing the amount on which interest is calculated. An offset account is a regular transaction account that has a VISA Debit card with ATM access, cheque book access and internet access. You can also redraw from this account if you need extra funds.

Loan term. This loan’s minimum term is 15 and the maximum term is 30 years.

Loan to value ratio (LVR). The maximum loan to value ratio (LVR) for this loan is 90%. Borrowing more than 80% will require you to pay lenders mortgage insurance (LMI).

Repayment options. Repayments can be made weekly, fortnightly or monthly with the Offset Variable Home Loan. Interest-only repayments are available for up to five years.

Redraw facility. This loan has a free redraw facility with no minimum redraw amount. This means you can get access to any additional repayments you've made 24/7, either online or over the phone.

Loan amount. The minimum loan amount is $50,000 and the maximum loan amount is $1,000,000 if you’re only using one asset to secure the loan (your property).

Accessibility. You can access your account online or by phone at any time. You can manage your money from an online interface which includes your loan transactions, loan statements, redraws and bill payments. You also get a VISA debit card that is connected to your offset account and has the additional security of Verified by VISA protection. Borrowers can access these funds via the CueCard ATM network, which includes Westpac, St.George, BankSA and Bank of Melbourne. You'll also receive up to five free ATM transactions a per month with an agreed list of financial institutions.

Split your loan. You can split your loan up to five times without incurring any additional charges. Splitting your loan gives you the ability to hedge your bets against upward rate movements, while also leaving room to take advantage of a reduction in lending rates.

Fees

The Offset Variable has no application, annual or monthly fees to worry about. Below are the fees you will have to pay with this loan:

Settlement fee: $300.

Valuation fee: $220 or at cost. This covers loans.com.au's third party costs. loans.com.au will have to have the value of your property appraised before they can use the property as a security to lend against. This fee typically increases when your property value is above $1 million.

Discharge fee: $300. This fee covers the administrative costs of preparing your loan discharge documents. Although loans.com.au say that there is no exit fee with this loan, when you pay out loan it will still be considered a discharge and the relevant fee will apply.

How to apply for this home loan

If you think the loans.com.au Offset Variable Home Loan is for you, then click 'Enquire' or 'Go to Site' and you will be safely redirected to the loans.com.au homepage. Once you’ve been redirected you will see a pink button that will allow you to enter your basic information. loans.com.au will then you give you an obligation-free follow up call. Scroll down to view the loans.com.au application process so you know what to expect.

The below diagram is courtesy of loans.com.au and represents the loan application process after you contact them.

The Liberty Financial Star (Variable) Home Loan is a full documentation loan. With a fixed rate option available, this loan allows you to make principal and interest or interest-only repayments. This loan is suited for both owner-occupiers and investors.

Also called ‘termination’ fee, settlement fee is charged when you pay out your mortgage in full. This may also apply to the costs to payout your loan and to switch the funds to your new mortgage. As with loans.com.au, the settlement fee of $300.00 is deducted from the loan proceeds at settlement.

Once your mortgage is paid in full, you will be required to pay discharge fees that cover the finalisation of the mortgage process and the paperwork involved in the change of title. This fee covers the administrative costs of preparing your loan discharge documents. Although loans.com.au say that there is no exit fee with this loan, when you pay out loan it will still be considered a discharge and the relevant fee will apply.

To clarify – I am looking to refinance – I presume I do not pay settlement fee? Are the only fees in my case “discharge fee”, payable whenever I either pay off the loan or take it to another bank, and “valuation fee”?

If you intend to refinance, you might still pay settlement fee which is the costs to payout your previous lender and to switch the funds to your new mortgage. Although, sometimes this cost is absorbed by the lender and waived for customers.

You may want to read our guide on refinancing costs to give you an idea on what other fees you may incur when refinancing your loan.

1. The offset account, is it just any standard savings account from any bank?

2. I am buying a house with my de facto, my portion is only 200000, the rest of the payment will be paid in full, cash basis. Therefore, both our names will be on the title. Does my de factor have to be my guarantor? Or will a guarantor be needed at all?

3. If I do decided to go to another lender at the end of say, 2 years. What will the discharge/exit fee be?

I have a 6 properties which are a group of units owned by me and brothers although they are all rented out. The loan we have currently is guaranteed by my father. Even though we have equity in them, would your bank be able to use the same guarantor to vary your LVR rates to avoid mortgage insurance?

I am awaiting property settlement – I am separating from my husband. I have been told that loans.com.au will lend up to 80% LVR. Given my circumstances – am I able to borrow the full amount (I intend to borrow from 240 000 to 320 000) on the proviso that I am going to get at least $200 000 from property settlement to use as deposit or is there another procedure I need to follow – such as a bridging loan?
once I complete and submit the loan application am I liable for any fees if I don’t proceed with the application?

loans.com.au can lend up to 90% LVR of the property. Once you decide to apply with loans.com.au they will charge a settlement fee of $300 and in addition a valuation fee. The valuation fee for a standard property in a metropolitan area in a major city starts at $220.00 for properties valued up to $1,000,000.

The valuation fee is not refundable and is payable when the valuation is ordered. The remaining $300 settlement fee is deducted from the loan proceeds at settlement.

The valuation fee is required from you is we do the valuation of your property and the settlement fee will be paid by you if are on the settlement stage of your loan.

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